The markets They will go through a new week with limited days due to the inactivity of the holidays, with accounting closings at the end of the year and the opening of another calendar cycle. In this context, banking activity and assets will remain closed Tuesday and Wednesday.
At a general level, the economic fundamentals open encouraging prospects for 2025. There is data that is exciting about the progress of the economy, with reduction of inflation, fiscal balance and an expected new agreement with the International Monetary Fund (IMF) that support the financial market at record levels and help reduce country risk.
Analysts take stock of the end of Javier Milei’s first year in the Government
“2024 was a crucial year for Argentina, characterized by the need for a significant shift in its policy direction economical. Under the leadership of Javier Milei, the country began a period of reforms that redefined the fiscal, monetary, and financial dynamics, in a context of high uncertainty and changing expectations“said Invecq Consulting.
“Forward the The biggest challenge is to maintain the robustness of the market, in line with the Government’s capacity to meet financial commitments. To achieve this, a key objective will be for country risk levels to continue compressing to the same levels as EMBI Latam (427 bp). which would imply an increase in sovereign bonds similar to 14%”he estimated.
“We are entering a new stage of the Government plan, where Lower inflation and sustained growth seem to be assured, with the intrigue of discovering the progress of the exchange rate to avoid its exchange rate delay,” said a financial agent from Bull Market Brokers.
“The main anchor of Milei’s positive image is the perceived suitability of the Government to solve what Argentines consider their main problem, which is the economy and specifically inflation. Another factor is hope, 40% of Argentines express hope as their state of mind, and this obviously translates into an expectation that 2025 will be better,” Mora Jozami, director of Casa Tres, said in radio statements.
“It closes a year that came as a 180-degree turn for the economy in numerous aspectswith the first economist and libertarian president in Argentine history at the helm. Javier Milei became president in response to society’s disappointment with ‘caste’ and its economic results,” the IEB Group reported.
“The combination of fiscal and monetary discipline has had its most impressive result on inflation. From flirting with hyperinflation at the end of 2023, to a debate about whether monthly inflation at the beginning of 2025 will be around 2% or 1%. The Government interpreted that a fundamental ingredient for containing inflation was exchange rate stability. Furthermore, the gap has practically disappeared from levels close to 200%“, said.
The market expects a correction in assets after gains of more than 300% in dollars
“We are coming from an important historical bullish rally for the stock market and bonds, so the natural rearrangement of prices should come from one moment to the next, with the advantage that the market is firm and optimistic, which suggests good signs for the short term.”said an analyst from the private Banco Macro.
“Since the elimination of the COUNTRY Tax (which taxed 30% on the demand for foreign currency), in recent rounds the central bank (BCRA) has been recording sales, a situation that operators monitor although it is expected that it would be the initial effect of scheduled payments, since In the current economic-financial context, the supply of currency would continue to prevails,” said economist Gustavo Ber.
“So it iss financial dollars appear calmer again, after the last rearrangement that left the ‘gap’ somewhat above 10%, which would be important for progress in the disinflation process to continue,” he said.
“At the local level, the positive ‘momentum’ continues (for the markets)where (…) country risk continued to decline in a challenging context for global markets. The data remains positive, although there are still issues to keep in mind, especially in terms of external accounts. Regarding inflation, Milei confirmed that if it remains at November levels, the ‘crawling peg’ would drop to 1% monthly,” commented the SBS Group.
“I do believe that we are on the eve of a cycle similar to that of the ’90s, but at that time the investment was for services, and now it enters through the export industry. Therefore, Argentina would have a similar period, but with a fiscal surplus “I even highlight some signs of reactivation that are beginning to be seen, and that the Government is likely to have a good mid-term election,” estimated Cristian López, Director of Novus AM.
Source: Ambito
